Covestro Enters into Virtual Power Purchase Agreement with Ørsted

Renewable Energy Covestro Enters into Virtual Power Purchase Agreement with Ørsted

2023-06-08 Source: Press release Ahlam Rais 2 min Reading Time

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The long-term agreement will form a part of Ørsted’s Mockingbird Solar Center project in Lamar County, Texas, USA which is expected to produce clean energy to power roughly 80,000 homes.

Ørsted and Covestro have established a virtual power purchase agreement for power from the planned Mockingbird Solar Center in Lamar County, Texas. (Source: © Covestro) — Ørsted and Covestro have established a virtual power purchase agreement for power from the planned Mockingbird Solar Center in Lamar County, Texas.
(Source: © Covestro)

Leverkusen/Germany – Covestro has signed a 90 megawatt (MW) virtual power purchase agreement (Vppa) with Ørsted. This new 15-year agreement secures a portion of power from the Mockingbird Solar Center in Lamar County, Texas, marking Covestro’s first renewable energy agreement in the U.S. The Vppa is estimated to offset 70,000 tons of CO2 emissions annually and will reduce the scope 2 emissions from Covestro’s third largest production site, located in Baytown, Texas.

“This important new announcement builds upon Covestro’s existing agreement with Ørsted and clearly signals our commitment to the use of renewable energy,” said Markus Steilemann, CEO of Covestro. “The inclusion of renewable energy to help power our facilities is a critical component to reducing our scope 2 emissions and becoming operationally climate neutral by 2035.”

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Covestro set itself ambitious climate neutrality goals in 2022. One major lever to reach these goals is energy from renewable sources, such as wind and solar power.

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“The Vppa with Ørsted comes on the heels of our recent announcement of ISCC Plus certification for our production site in Baytown, Texas,” explains Haakan Jonsson, chairman and president of Covestro. “These two initiatives represent our focus on sustainability and the strategic path we have set to minimize our carbon footprint across Covestro’s operations in the United States. Cumulatively, projects like this help us realize our path to becoming fully circular.”

One concrete measure on this path is climate neutrality, which includes the switch to power from renewable sources. Covestro relies on agreements with power suppliers to facilitate this transition.

“We are thrilled to help facilitate Covestro’s entry into the U.S. renewable energy market with this newly signed virtual power purchase agreement,” said Monica Testa, Head of Origination at Ørsted. “The Mockingbird Solar Center is a unique project that represents both preservation and progress. The clean energy produced by the solar center will help Covestro to decarbonize its operations, while the conservation of rare native tallgrass prairie habitat supports plant and wildlife biodiversity in the region. We’re proud of the important outcomes this project achieves and look forward to our continued partnership with Covestro.”

Ørsted’s Mockingbird Solar Center will produce enough clean energy to power roughly 80,000 homes and is expected to begin operation in late 2024. At that time, Covestro will start executing on the Vppa, which represents nearly 20 % of the Mockingbird Solar Center’s capacity.

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